EXACTLY THE KIND OF ECONOMIC TRANSFORMATION THE REGION NEEDS:

Dubai's Two Faces (David A. Andelman, 02.24.06, Forbes)

This is the new Dubai, presided over as a centerpiece by Dubai Ports World, among the largest and most prosperous of the emirate's new, homegrown corporations. DP World, at the centerpiece of the latest Washington imbroglio over terrorism and global security, rose to its global power and wealth on the growth of Dubai as the principal transit point for goods and services the length of the Persian Gulf and across the Middle East.

Now embarked on a worldwide expansion effort, DP World is a symbol of the global reach and power to which this one-time mud-walled village near the strategic Straits of Hormuz now aspires.

But the old Dubai is also not far off. Here, along Dubai Creek, not far from the Gold Soukh shopping area and the narrow teeming streets where Indians and Pakistanis from the subcontinent peddle textiles and piece goods, huge, old wooden dhows that also ply both sides of the Persian Gulf tie up. They discharge their cargo directly onto the quays--thousands of bulging cardboard boxes that have never seen the inside of an RFID-monitored shipping container.

These are the remnants of the old Middle East. And Sheikh Mohammed bin Rashid al Maktoum, who became ruler of Dubai just last month after the sudden death of his elder brother, is determined that the old Dubai will not in any fashion impinge on the development of the new Dubai--where businessmen from the Netherlands and New York arrive to plunk down hard cash for 14,000-square-foot apartments or sprawling villas that overlook the sea.

"This sheikh understands the value of progress and of a can-do attitude," says the manager of one of Dubai's leading hotels, smiling. He has lived here for years and watched this miracle sprout from the desert sands of the United Arab Emirates.

And clearly the sheikh is also not afraid. The miles of palaces belonging to the ruling family that mark long stretches of Dubai's glistening sand beaches are all but unpatrolled, the gates standing nonchalantly open on a leisurely Friday afternoon, the final day of the two-day Arabian weekend.

"There is no need for security," says one longtime resident who came to Dubai 20 years ago and, like 90% of the principality's residents, is a foreigner--in this case from southern India. "He has no need for security because he has no enemies."

Indeed, with the prosperity over which the royal family has presided, it's hard to see how the sheikh could have many enemies. In part this is due to the adept fashion in which the ruling family of Dubai has managed to walk the very fine line between friend, ally and financial partner with regard to the West, especially the United States, while recognizing that at the same time it is still very much an Arab nation in a volatile Middle East region.

He wasn't counting on the American fundamentalists.

MORE:
American Ports in a Storm: Columnist Thomas L. Friedman calls American objection to the Dubai port deal “shameful” (YaleGlobal, 23 February 2006)

The company manages container terminals and logistics operations in more than 100 ports spread over nearly 20 countries including China, India and Europe. The US politicians have criticized the deal because of Dubai’s past link to the terrorists and have argued that unlike P&O, which too was a foreign-owned company, the DP World is state-owned.

However, Friedman says “We’re not turning over our ports, security over to Dubai Port Authority. We’re turning over the port authority and six ports to people who will say, “Park here, park there. Collect the fees and what-not and manage the traffic of the port.” Inspection will be done by the American workers and not by “cousins” brought from Dubai. “I think it’s a shameful and has slightly racist overtones to it," he says. “This is about keeping ‘a bunch of Arabs’ out of our country, that’s what this is really about. And it’s a bad thing, not only because it doesn’t reflect our real values.” Friedman points out that American companies like IBM, FedEx or UPS run around, doing business in the Arab world. “What if they then turn around and say, ‘You’re not going to take ours, well, we’re not going to take yours.’ We’re in a very dangerous tit for tat that could get going here.”

Friedman agreed that the unspoken subtext of the American criticism is the fact the DP World is run by Muslims. He sees a dangerous lurch toward such nativism provoking backlash. “It’s part of the dangerous backlash going on. Both sides are guilty of it. When people ransack a Danish embassy in Damascus and the government allows it. You know, governments are there to restrain people’s worst impulses. We have nativists in our country. They have nativists in their country that are going to always want to push these issues. Government’s job is to restrain that, and I think this is a real issue, a really shameful episode. I think the president’s right on this one.”

Globalization spawns port situation: U.S. needs friends in the Arab world such as UAE, say ex-diplomat and scholar (Douglas Birch, February 23, 2006, Baltimore Sun)

The furor over Dubai Ports World is calling into question whether Americans understand or trust even an Arab government that has close ties to the United States and shares its concerns about terrorism.

The United Arab Emirates are seven sheikdoms spread along the southern shore of the Persian Gulf and loosely united in a federation. Until the debate erupted in Washington about the Dubai Ports World plan to partly manage ports in Baltimore and five other American cities, the Emirates were known largely for making money, not involvement in radical Islamic politics.

"I think this thing is a firestorm that's, frankly, politically motivated, and a dangerous one because it tends to polarize our relations with that part of the world," said Michael Sterner, a retired diplomat who was U.S. ambassador to the UAE in the 1970s. "I don't see any concerns whatsoever with having this state-owned company run the ports." [...]

"It's the Singapore of the Middle East," said Michael C. Hudson, director of the Center for Contemporary Arab Studies at Georgetown University in Washington. "There's an enormous boom going on there, and they don't want to spoil it." [...]

Maintaining close ties to moderate Islamic states such as the Emirates is "essential" for the U.S., said Joseph A. Kechichian, an independent scholar and author of A Century in Thirty Years, a book about the UAE.

"We are now told to be afraid of Arabs because Arabs are terrorists," he said. "This is childish. And it's politically unwise. We need allies in the Muslim world, and the United Arab Emirates is one of the most important allies in the war on terrorism. We must not ostracize them."

The view that Arab-owned companies should be mistrusted or barred is naive at best, he said: "We have to accept that in a globalized economy, there will be new investors who will have leeway in global financial matters."

Terrorist groups have used the Emirates as a transit point for personnel and finances, experts say, because the Emirates are less authoritarian than many neighboring states.

One thing the whole kerfuffle illustrates is how tightly interwoven nativism, isolationism and protectionism are. Hillary Clinton can make some hay there.

Posted by Orrin Judd at February 24, 2006 1:20 PM